US Business Cycle about the Bulls and Bears - Essay Example

The high percentage of bull readings indicates that many investments have occurred. This boosts the economy because investors' resources have been utilized in buying stock. This provides an economy with a good cash base for recurrent developments. Consequently, according to the investors' speculation, the US economy flourishes because economic projects are completed before the stock price rise.

The bearish readings are low at 27%, which indicates that economic growth is hampered because liquid cash is held by the investors, who are speculatively waiting for a drop in stock prices. According to the survey, bullish indicators have fallen slightly. This move also shows that the US economic growth is reducing at a slow rate. Slump Conversely; the bearish readings have been constant all along. The situation for the bearish market shows that the economy is better because the bear readings are stable while the bullish reading has a slight decrease.

The monthly allocation survey indicates that the investors are majorly focused on equities. The investors are also decreasing their cash base, manifesting complacency in investment decision-making. The AA survey has also shown that the bullish readings have improved while the bearish readings have dwindled to 19%. The bullish readings reduce monthly while the bearish readings continue to increase constantly. The loss of confidence in the economy emanates from increased inflation, interest rates, and general prices.

The rise in the stock market results in a change in the quantity of money in the money market. Additionally, this aspect leads to a change in the expenditure of the consumer. The inflation rate in the US economist graph determines the stock rise, indicating that the stock market sustainably fluctuates in the long term. This enables the stock market to be stable. Since the stock market determines the money market and the goods market stability, there is stability in the long term in all these markets.

Consequently, there is economic progression. Recovery The graph indicates that the bearish advisors have remained below 20% for 24 weeks. This condition also implies that the investment participants are complacent. The survey also shows 91% of net long exposure. The weekly intensity was 150%. This indicates that the fund managers have been indifferent to the equities every week of business. The power of vulnerability remains at 170% net long. This figure is obtained by averaging the last six weeks.

The overall result of this business cycle is that there is economic progression. An increase in the bullish readings indicates consumer confidence in the economy.in this respect, the investors invest in the stocks of their investment advisor’s analysis of the overall economy. The graph reflects the stock market bust, which is attributed to the drop in the bullish readings.